Have you learned about the benefit of a simplified employee pension plan yet? Since they’re simple to use, SEPs are becoming one of the most popular ways to prepare for retirement. Contributing to a SEP is just like contributing to an IRA, and you can direct everything yourself.
Simplified Employee Pension Plan
To qualify for a SEP, you must have earned at least $650 from an employer. The annual contribution limits for this type of plan are much higher than an IRA. So, you can invest more in one than you can in other accounts. You can put up to 25% of your overall pay into one, or up to $58,000. This is a lot more than what’s given to people investing with traditional IRAs.
Self-Directed
Since the employee decides whether to invest in a SEP, they control what happens to the money. If you’d like to put some toward tech companies, then you can choose to do that. However, you must conform to the rules established by the plan’s trustee. Otherwise, it wouldn’t be a legal investment decision, and you’d be at risk. If you’re self-employed, you can use one of these to invest for retirement as well.
Rapid Transactions
One of the main benefits of using a trustee is how fast you complete transactions. Once you’ve submitted an order, it usually takes less than 2 days for the deal to finalize. Also, you may continue making contributions until your company’s tax filing deadline. That gives you much more flexibility than what you’d get with a traditional IRA.
